Over the past week, the GBP had been trading in a tight range between 1.2660-1.2750, however, the recent quiet leg of sterling is expected to be broken this week, as recent Brexit negotiations confirmed the date of Brexit vote, which would take place in UK House of Commons, on January 15th.

The Brexit vote was due to be held on last December, yet the vote was postponed, as PM May had been trying to buy more times for her Brexit deal. At this standpoint, the Brexit outlook remained foggy, as yesterday, the UK health minister had been quoted saying that the number votes in favour of Brexit had significantly improved over the Christmas Holidays, when UK PM May, called the UK lawmakers to back her Brexit deal to proffer Britain a breathing space.

While GBP had been trading above its key resistance area at 1.2778 and looking forward to breach above the sentimental resistance level at 1.2810s, the UK stocks had again been faltering, and UK’s FTSE 100 had posted a 0.39 percent plunge on January 7th, Monday, GMT. 18.00.

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GBP/USD daily chart

If the Brexit vote could not make it through to the UK House of Commons, GBP might retest its 20-months low at 1.2465, while a Brexit deal could eventually result in a jumpstart.

Whatever happens, the market would be observing the most volatile days of this year, in the upcoming days, as Brexit vote is vying to keep the GBP momentum going.

Bottom Line

Yesterday, in a press briefing, the UK PM May, again warned UK policymakers regarding the fate of a no-deal Brexit and he cautioned that the Britain would be in an uncharted territory, if the Brexit vote could not make it through.

While this Brexit vote had been hurting the market sentiment, the shares of Eurozone had been up except UK’s FTSE, as German 30 posted a gain of 2.22 percent and the France 40 rose by 1.88 percent.

In a near-term outlook, the Brexit volatility might jolt the GBP above 1.2800 region, as a softened American dollar had at last botched to dictate terms and was residing at 95.09 during the preparation of the report, Jan. 7th, GMT. 18.00.

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